Running Head: ECONOMICS ESSAY III 1

Economics Essay III

Task:

Write an essay that describes the relationship between regulation and market structures and how regulations affects the market.

A Define Industrial Regulation

Explain why industrial regulation exists, how it affects the market, provide entities affected by industrial regulation in terms of market structure, and why industrial regulation affects those entities.

Economic regulation is a form of government intervention designed to influence the behavior of firms and individuals in the private sector (Econ Guru Web). Other forms include public expenditures, taxes, government ownership, loans and loan guarantees, tax expenditures, equity interests in private companies and moral suasion. It is the imposition of rules by a government, backed by the use of penalties, that are intended specifically to modify the economic behavior of individuals and firms in the private sector, regulation in general is aimed at narrowing choices in certain areas, including prices (airline fares, minimum wages, certain agricultural products, telephone rates), supply (broadcasting licenses, occupational licensing, agricultural production quotas, pipeline certificates "of public convenience and necessity"), rate of return (public utilities, pipelines), disclosure of information (securities prospectuses, content labeling), methods

ECONOMICS ESSAY III 2

of production (effluent standards, worker health and safety standards), standards for products or services (safety of children's toys, quality of food products, content requirements in broadcasting) and conditions of service (requirements to act as a common carrier or not to discriminate in hiring or selling goods and services) (Bureau of Safety and Security).

These regulations encompass production, pricing and other business practices within